WINSTON-SALEM, N.C.– Piedmont Advantage Credit Union (PACU) has issued a statement cautioning businesses that process debit card payments as credit card transactions to not surcharge their customers, noting federal law prohibits the practice.
PACU President & CEO Dion Williams said during his podcast and again on a local radio program that he learned from one of the credit union's board members that several of his receipts had surcharges when his debit card payments had been processed as credit card transactions.
"We believe that there may be a growing number of small businesses who are misinformed by their merchant services provider,” Williams said in the statement.
Explaining the Difference
After explaining in the statement the nature and differences of debit and credit surcharges, Williams said, "The differentiator to surcharge isn't whether the business' customer entered a PIN or not. The differentiator is whether the customer used a debit card or a credit card at the point of sale. To put another way, the prohibition on surcharging applies to the underlying payment method, regardless of how the transaction is processed."
Williams also explained how the Durbin Amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act prohibits
surcharging consumers who pay by debit card.
Recommendations Shared
For consumers who are surcharged, Williams offered these recommendations to consumers:
- Consider having a conversation with the businessowner. "In my experience, small businessowners rely on their merchant services provider to set up their card-readers correctly, so bringing this prohibited surcharge to their attention would be appreciated,” Williams said.
- Keep receipts and dispute the charge with the card issuer (bank or credit union). "Your financial institution will contact the card company on your behalf for reimbursement."
- Consider contacting the Attorney General's Office as this office is responsible for enforcing consumer protection laws and ensuring fair business practices.
The $402.2-million Piedmont Advantage CU has approximately 35,000 members.
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